In this piece, we will discuss the 11 Best Restaurant Stocks to Buy Right Now.
With 2025 proving to be a turbulent year for the restaurant industry, investors will welcome the new year with one key question: which restaurant stocks are best positioned to overcome shifting consumer behavior, cost pressures, and operational changes? David Palmer, Senior Managing Director and Head of the Restaurant and Food Producers team at Evercore ISI, appeared on CNBC’s Squawk on the Street on December 23, 2025. His discussion on the sector is quite relevant to that question.
The discussion began with a look back at 2025, a choppy period marked by early optimism that gave way to weak consumer sentiment and tariff-related costs. While some brands leveraged value deals and discounting for a turnaround, many are still struggling. The discussion identified commodity inflation, particularly beef prices, as one of the key factors shaping the 2026 outlook. More importantly, the net inflationary impact on middle-income consumers remains a key concern, according to David Palmer. In the current environment, he sees relatively higher strength in the casual dining segment, thanks to its stronger resilience than the fast food segment. He believes the segment could potentially benefit from early tax relief. He pointed out that operators focused on value execution are more likely to stand out.
Meanwhile, on December 30, 2025, CNBC touched upon technology’s growing role in the sector amid a hyper-competitive environment. CNBC reported that major restaurant operators, such as Chipotle and Cava, are pouring money into automated makelines from startup Hyphen. These are helping them up their service speed, reduce labor strain, and minimize food waste. These investments reflect an increasing focus on efficiency and consistency within the sector and the key themes shaping the best restaurant stocks today.
Photo by Clem Onojeghuo on Unsplash
Our Methodology
To curate our list of the best restaurant stocks to buy right now, we used financial media and screeners to identify restaurant stocks with significant analyst coverage. Next, we assessed hedge fund sentiment surrounding these stocks using Insider Monkey’s hedge fund database, which tracks over 1,000 hedge funds as of Q3 2025. We ranked these stocks in ascending order by the number of hedge funds that are bullish on them. We also considered the upside potential of each stock as of market open on January 6, 2026.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 427.7% since May 2014, beating its benchmark by 264 percentage points (see more details here).
11. Papa John’s International, Inc. (NASDAQ:PZZA)
Number of Hedge Fund Holders: 26
Upside Potential: 20.40%
Papa John’s International, Inc. (NASDAQ:PZZA) is one of the best restaurant stocks to buy now.
As of January 6, 2026, roughly 40% of analysts are bullish on Papa John’s International, Inc. (NASDAQ:PZZA) with a median price target of $48.00, amid the company’s strategic and expansion initiatives. The price target translates into an upside potential of 20.40%. The most recent analyst update came from Jefferies on December 15, 2025, where it reiterated its “Hold” rating on the stock with a $45 price target.
Jefferies’ reaffirmation followed Stifel’s update in the previous month. Stifel also reiterated its “Hold” rating on Papa John’s International, Inc. (NASDAQ:PZZA) with a $42 price target. The update came after analysis of the company’s 10-Q filing. The investment firm updated its financial model to incorporate the company’s planned cost-saving initiatives for 2026. The model now also includes management’s plans to refranchise a significant portion of its domestic company-owned restaurants over the next two years. In November, Papa John’s International, Inc. (NASDAQ:PZZA) made a strategic refranchising announcement, refranchising 85 restaurants in the Washington, D.C., and Baltimore markets to Pie Investments, led by Chris Patel. This came after the retirement of longtime franchise partner William Freitas. Within the same announcement, Papa John’s also announced that it plans to open 52 additional restaurants by 2030 across the Greater Philadelphia, Washington, D.C., and Baltimore markets.
For fiscal 2026, the firm projects EBITDA of approximately $205 million, representing approximately 4% year-over-year growth. The firm’s EBITDA forecast is below the Street consensus estimate of $213 million. Additionally, Stifel mentioned that the EBITDA metric could vary if Papa John’s International, Inc. (NASDAQ:PZZA) makes an incremental investment in its marketing fund. The company has already invested $25 million in marketing so far in 2025. The firm’s projections include a $10 million incremental investment in marketing.
Papa John’s International, Inc. (NASDAQ:PZZA), an American pizza restaurant company, operates one of the world’s largest pizza restaurant chains with about 6,000 restaurants in approximately 50 countries and territories.
10. The Wendy’s Company (NASDAQ:WEN)
Number of Hedge Fund Holders: 30
Upside Potential: 11.00%
The Wendy’s Company (NASDAQ:WEN) is included in our list of the best restaurant stocks to buy now.
The Wendy’s Company (NASDAQ:WEN) saw analyst pressure rising at the end of December, with RBC Capital reducing its price target from $9.00 to $8.50 on December 22, 2025, while reiterating a “Sector Perform” rating. The firm’s reduction in its price target reflects cost and margin risks heading into 2026, believing that consensus G&A expense assumptions appear understated. Acknowledging that 2025 G&A declines were due to lower incentive compensation, the investment firm projects that fiscal 2026 G&A could rise to $285-290 million. This projection is well above the Street estimate of $264.6 million.
Furthermore, RBC Capital projects potential downside to restaurant-level margins (RLMs), driven by pressure from U.S. same-store sales growth of 0%-1% alongside heightened beef inflation. The company-owned restaurants contribute roughly 37% of operating profit. Thus, the investment firm believes that a reduction in RLMs to 12.7% from 13.5% could result in a 3.5% EPS headwind. Accordingly, the investment firm lowered its 2026 EPS forecast by 13.0% to $0.68 and its 2027 EPS forecast by 11.8% to $0.79.
The month also witnessed a bearish outlook from analysts. On December 17, 2025, Goldman Sachs reduced its price target on The Wendy’s Company (NASDAQ:WEN) from $9 to $8, reiterating a “Sell” rating. Two weeks earlier, JPMorgan also reduced its price target from $12 to $9 and downgraded the stock to “Neutral.” The firm’s cautious stance reflects weak U.S. system economics, declining average unit volumes, and elevated capital requirements tied to developments, remodels, and technology investments.
The Wendy’s Company (NASDAQ:WEN), a U.S.-based fast-food operator and franchisor with over 7,000 restaurants globally, focuses on burgers, chicken, and quick-service dining.
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